The online surf report from Sorted Surf Shop isn't too promising: 'Flat today, but might get a wave midweek.' By September, the hope is that the outlook here in Boscombe will be considerably better.

Last month, work began on a project to create Europe's first artificial reef by dropping hundreds of sandbags into the sea some 245 yards off Boscombe's beach. The £1.4m project is aimed at turning a sedate suburb of Bournemouth into the south coast's leading surf centre, since the reef will - if all goes to plan - generate waves up to 13ft high and double the number of good surfing days in Boscombe from 153 to 306 a year, setting the town up as a rival to Newquay in Cornwall.

The reef, though, is just one part of a regeneration project which it is hoped will revitalise Boscombe, and make it a property hot spot in the next few years. Work has already begun to put Boscombe's crumbling pier back into shape - it will have its end lopped off and be given a smart new entrance building, due to open by May. The £8m regeneration revolves around a 'Spa Village' that includes new restaurants and shops, extensive landscaping, and 42 'super chalets' - upmarket beach huts that will be available for hire by the day.

It's all being paid for by - you guessed it - a development of luxury apartments. Barratt Homes has spent more than £9m on an old car park on the waterfront, which it is converting into Honeycombe Beach, a set of 169 apartments in nine blocks, clustered rather tightly around communal gardens and a courtyard. Some, but by no means all, of these new homes will enjoy spectacular views across Bournemouth Bay and Swanage, towards Hengistbury Head.

Prices for the first group, to be sold off-plan, start at £389,000 for a two-bedroom, two-bathroom apartment that doesn't even have sea views - it looks into the courtyard. A similar apartment with sea views, and a study thrown in, will cost you an eye-watering £950,000. The first apartments will be ready to occupy in spring 2008.

Boscombe has an interesting - though chequered - history. A large part of it was owned in the mid-19th century by Sir Percy Florence Shelley, son of the poet. In the 1860s Lord Malmesbury had the idea of using Boscombe's natural spring to create a health spa that emphasised fresh sea air and bathing. That scheme was soon abandoned in favour of building big houses instead, and over the next couple of decades Boscombe developed as a conventional seaside resort.

From the 1950s to the 1970s, however, it went into decline, and many of its grand Victorian houses were split into bedsits. It has taken a couple of decades for regeneration to finally get off the ground.

James Scollard, who runs estate agent Clifftons, says the bedsits are now firmly on the way out: 'Boscombe has already come up a great deal during the past couple of years. We've seen a lot of the older houses come down to be replaced with luxury apartments.' He says the council is now rejecting the conversion of further hotels and B&Bs into apartments, in an effort to revive the town's appeal as a family holiday resort. Some £2m has also been ploughed into improving and landscaping Boscombe Chine Gardens, with new paths, pagodas and playgrounds.

The most unfortunate aspect of Boscombe's decline was that the bedsits attracted drug users. And the problem hasn't been entirely cleaned up: only last year, a local woman found 13 discarded needles on a beach where her children were playing.

But Scollard is enthusiastic about Boscombe's revival. 'The reef is going to make this one of the best places to surf in the country, and it will generate lots of extra visitors for B&Bs, hotels and holiday apartments,' he says. 'For investors, capital growth should be strong here for the next few years.' He thinks surfers are unlikely to be in the market for £300,000 apartments, but Nigel Still, from upmarket estate agent Stephen Noble, takes a different view. 'I think the reef is a masterstroke,' he says. 'It will be great for windsurfing, surfing, all kinds of watersports. And you'd be surprised who's into these sports: it goes from the mid-teens to the mid-to- late forties, and includes a lot of affluent people, as well as those who simply like to sit and watch the spectacle.'

Barratt's apartments at Honeycombe Beach will appeal to those who like to be right down by the water, but there are plenty of other options for buying in Boscombe - many at less elevated prices. Stephen Noble is selling The Reef, for example - a new-build development of 55 two- and three-bedroom luxury apartments directly above Boscombe pier, where prices range from £250,000 to £850,000. The penthouses have terraces with hot tubs.

The Litzo is a stylish development of apartments and townhouses, also at the top of the cliff, by developer Blue Homes. There's one townhouse still for sale there, also through Stephen Noble, for £695,000. In less vaunted positions, Scollard says you can still buy a two-bedroom flat in a converted house in Boscombe for around £160,000.

'As an investor, that's what I'd probably go for,' he says. 'A property like that has great potential to increase in value.'